Environmental, social and governance | UK Regulatory Outlook March 2024

CSDD gets through vote from Council of the EU

The Council of the European Union, on 15 March, reached a significant milestone by finally agreeing on the text of the Corporate Sustainability Due Diligence Directive (CSDDD), following a series of meetings since the provisional political agreement was reached between the Council and the European Parliament.

The most significant change to the CSDDD is the increase in the scope of thresholds. Initially, the directive aimed to apply to EU companies with a minimum of 500 employees and a turnover of €150 million. These thresholds have been adjusted to include EU companies with a minimum of 1000 employees and a net turnover of €450 million. Other changes include removal of the high-risk sectors approach, narrowing the definition of the supply chain and introducing a staged approach.

The text now needs to be formally approved by the European Parliament in April, after which it will be formally adopted by the Council before being published in the Official Journal of the EU and entering into force 20 days later.

Companies, both in the EU and outside, now face the task of reassessing whether they fall within its scope, understanding when the measures will take effect and what actions they will need to start taking to ensure compliance with the new rules. Read our Insight for more.

European Parliament adopts first reading position on Green Claims Directive

The European Parliament has adopted its position on the Green Claims Directive – the new rules setting out what types of information companies need to provide to justify their environmental marketing claims (see our Insight for further information).

The directive will be followed up by the new Parliament after the EU elections, which take place on 6-9 June 2024.

The UK's sustainability disclosure requirements for fund managers

The Financial Conduct Authority (FCA) published its much-anticipated policy document in November last year setting out the core components of its new sustainability disclosure requirements (SDR) and investment labels regime and who it will affect.

The questions fund managers now need to address about the application of the SDR are what sustainability information must be provided, and when and how it must be provided. Find out in our Insight.

For sustainable funds, fund managers should consider whether they wish to opt in to using a SDR label for each fund and, if so, which one. For more, see our Insight.

International ESG Knowledge Update

Our latest round-up of legal, regulatory and market news

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EU directive to empower consumers for the green transition published in the Official Journal of the EU

Please see Advertising and marketing.

Update on regulations to eradicate modern slavery in NHS supply chains  

Please see Modern slavery.

Political agreement reached on Forced Labour Products Regulation

Please see Modern slavery.

Extended producer responsibility for packaging waste: reporting changes coming into force 1 April 2024

Please see Products.

UK government consultation on introduction of CBAM

Please see Environment.